01/21/2026
Confused About Who Needs a 1099? You’re Not Alone!
If you paid someone for services (not an employee) during the year, here’s what you need to know:
What requires a 1099-NEC?
If you paid $600 or more to a non-employee for labor or services (contractors, freelancers, consultants, etc.), you may need to issue a 1099-NEC.
Examples of services:
• Independent contractors
• Bookkeepers & accountants
• Designers, IT, consultants
• Any service-based work for your business
Payment method matters!
You only issue a 1099 if payments were made by:
*Cash
*Check
*ACH / bank transfer
Do NOT issue a 1099 for payments made by:
• Credit or debit card
• PayPal, Venmo, Square, Stripe, or other payment apps
Those are reported separately on a 1099-K by the payment processor.
A few quick notes:
• Payments for products only don’t require a 1099
• Most corporations don’t require a 1099 (except legal services)
Still unsure about a vendor? That’s normal! Feel free to reach out and I’ll help you sort it out